Facebook Vies With Google and Apple for Mobile-App Makers

While Facebook Inc. once was a key site where software makers like Zynga Inc. introduced their games, many programmers have since turned their attention to building apps for smartphones instead. Photographer: Justin Sullivan/Getty Images

The social network recently reached out to Helsinki-based
Huuuge Inc., the maker of the game, to convince the team to
build mobile applications with its tools. The startup didn’t
bite, said Anton Gauffin, Huuuge’s founder and executive
chairman.

“I don’t think developers really see Facebook as a tool or
provider of help for developers,” said Gauffin, who added that
his team makes games using Apple Inc.’s software.

Facebook is pushing to change that perception this week at
the F8 developer conference in San Francisco, the company’s
first major event for app makers since 2011. While Facebook once
was a key site where software makers like Zynga Inc. introduced
their games, many programmers have since turned their attention
to building apps for smartphones instead.

At F8, Chief Executive Officer Mark Zuckerberg is set to
rally developers with a new message: Facebook has software that
makes it easier to build apps for mobile phones, as well as
tools that help programmers sell those wares to the social
network’s 1.28 billion users. The more developers use the
technologies, the more prominence the social network gains in a
mobile world dominated by Apple and Google Inc.

At the center of Facebook’s developer strategy is Parse,
which the company acquired a year ago. Parse offers technology
to more quickly build an app and keep consumers engaged. Over
the past 12 months, the number of apps built using Parse’s tools
more than tripled to 260,000, the company said. Parse will be
featured during Zuckerberg’s F8 keynote on April 30, and the CEO
will be joined on stage by Parse chief Ilya Sukhar.

Problem Solvers

“Now we’re absolutely focused on solving people’s problems
-- build, grow, monetize,” said Sukhar, who is also head of
developer products at Facebook.

All of this contrasts with Facebook’s last F8 conference.
At that event, the Menlo Park, California-based company promised
developers they could popularize their apps on the social
network by sending messages and prompts through users’ friends.
Yet that created more spam on Facebook and annoyed consumers,
leading the company to limit developers’ freedom on the site.

“We’ve definitely moved away from the world of ‘send a cow
to 100 of your closest friends in one click,’” said Sukhar,
referring to Zynga’s method of distributing its FarmVille game
on Facebook years ago.

Mobile Ambitions

Getting more developers to use its tools is key to
Facebook’s mobile ambitions. Mobile ads now generate 59 percent
of the company’s advertising revenue, up from almost nothing at
the time of its 2012 initial public offering. The mobile
business has powered the company’s stock, which has more than
doubled in the last year. While shares dropped late last week,
Facebook is up 5.6 percent for the year, compared with a 2.4
percent decline in the Nasdaq Composite Index.

To boost mobile revenue, Facebook has leaned on a type of
ad it offers developers to drive downloads of their apps, called
app-install ads. Those promotions are one of Facebook’s best-performing products, responsible for more than 350 million app
downloads since they became available in January 2013, Chief
Operating Officer Sheryl Sandberg said in an earnings call with
investors last week.

Explaining Parse

Programmers can use Parse’s tools to handle the complex
interactions that happen behind the scenes in an app, as well as
to integrate user identity data from the social network and
track how people are using the app. Parse’s basic tools are
free, with premium features starting at $199 a month.

The product is geared to developers who aren’t technical.
Parse walks a person through the steps of building an app,
storing all the data on Facebook servers. Once the app is up and
running, Parse shows the developer a page prompting them to
advertise on Facebook to boost downloads.

“It’s so much easier if you’re built on Parse to integrate
these other services,” Sukhar said. His team has doubled to
about 50 people since Parse was acquired and the executive said
he has regular meetings with Zuckerberg, who has vetted products
and recruited developers to the tool. Customers include EBay
Inc. and Samsung Electronics Co., he added.

Essential Facebook

The more that developers incorporate Facebook data, the
more essential the social network becomes in mobile advertising,
said Bob Buch, CEO of San Francisco-based SocialWire Inc., which
helps build Facebook ads. That’s because consumers use their
Facebook identity for activities across all their devices,
making the social network one of the few connectors in mobile,
he said.

Facebook has said it is testing a mobile-ad network, which
could eventually also help developers profit from their apps,
Buch added.

“They’re reviving F8 after all this time and a main thing
they’re going to be offering is a way to actually make money,”
Buch said.

Some software makers won’t be won over easily, said Slaven
Radic, CEO of Vancouver-based Tapstream Network Inc., which
works with mobile developers. He said he’s seen some developers,
including makers of the anonymous-sharing app Secret, choose to
build social ties into their products using consumers’ contacts
list from their smartphones instead of a list of Facebook
friends.

Apple, Google

In the mobile world, developers are also still more focused
on appealing to Apple and Google, which are the prime
distributors of apps through their online stores, Huuuge’s
Gauffin said.

“With all the competition now, I don’t know if they can
get back to the glory days,” he said.

Yet using Facebook and its tools is paying off for Itai
Tsiddon, co-founder of app maker Lightricks Ltd. The company
started building with Parse last year after trying Facebook’s
ads. Tsiddon’s team, initially made up of himself and four PhDs
with $500 in marketing dollars between them, relied on the ads
to boost downloads of Facetune, a selfie-editing app.

Facetune, which costs $2.99 in the U.S., has been the top
paid app on Apple’s store in 94 countries, bringing in millions
of dollars in revenue last year, he said.

Now Facetune uses Parse to send video tutorials to users on
their mobile phones, showing how to edit their selfies so they
will come back for more.

“Every time we send a notification like that, we
definitely see really big double-digit spikes” in usage,
Tsiddon said.